ALGERIA ABLE TO ADJUST TO LOWER OIL PRICES, SAYS IMF
WASHINGTON, -- The International Monetary Fund (IMF) says Algeria -- Africa's leading natural gas producer and second largest oil producer -- is able to adjust to the decline in oil prices which has had only a limited effect on its economic growth so far.
In its annual report on the Algerian economy as part of the Article IV Consultations which the Fund carries out with member countries, the IMF said that "thanks to buffers accumulated in the past, Algeria has a window of opportunity to smooth the adjustment to the shock and reshape its growth model" although its "fiscal and external balances have deteriorated significantly".
Last April, the IMF welcomed the latest adjustments of the government relating to growth which is based on budgetary efficiency, local resource mobilization and expansion of the tax base without raising tax rates.
The Fund's growth forecasts for Algeria indicate improvement until 2021 despite the oil price decline which may continue over time.
In 2015, the real gross domestic product (GDP) expanded 3.9 per cent, according to the IMF, which expects growth rates of 3.4 per cent in 2016 and of 2.9 per cent in 2017. Growth will rise from 2019 onward to stand at 3.4 per cent in 2021.
Growth of the hydrocarbon sector, which recovered in 2014, after two years of recession, will maintain an upward trend over the coming five years, said the IMF.
The fiscal deficit which doubled to 16 per cent of GDP as a result of the decline oil and gas revenues, will gradually decrease during the next five years to stabilize at 5.3 per cent in 2021.
Source: Name News Network